'FinCEN' doc­u­ments show banks moved il­licit funds

The Pak Banker - - FRONT PAGE - NEW YORK -AP

Sev­eral global banks moved large sums of al­legedly il­licit funds over a pe­riod of nearly two decades, de­spite red flags about the ori­gins of the money, Buz­zFeed and other me­dia re­ported on Sun­day, cit­ing con­fi­den­tial doc­u­ments sub­mit­ted by banks to the US gov­ern­ment.

The me­dia re­ports were based on leaked sus­pi­cious ac­tiv­ity re­ports (SARs) filed by banks and other fi­nan­cial firms with the U.S.

Depart­ment of Trea­sury's Fi­nan­cial Crimes En­force­ment Net­work (FinCen). The SARs, which the re­ports said num­bered more than 2,100, were ob­tained by Buz­zFeed News and shared with the In­ter­na­tional Con­sor­tium of In­ves­tiga­tive Jour­nal­ists (ICIJ) and other me­dia or­ga­ni­za­tions.

In all, the ICIJ re­ported that the files con­tained in­for­ma­tion about more than $2 tril­lion worth of trans­ac­tions be­tween 1999 and 2017, which were flagged by in­ter­nal com­pli­ance de­part­ments of fi­nan­cial in­sti­tu­tions as sus­pi­cious. The SARs are in them­selves not nec­es­sar­ily proof of wrong­do­ing, and the ICIJ re­ported the leaked doc­u­ments were a tiny frac­tion of the re­ports filed with FinCEN. Five global banks ap­peared most of­ten in the doc­u­ments - HSBC Hold­ings Plc HSBA.L, JPMor­gan Chase & Co JPM.N, Deutsche Bank AG DBKGn.DE, Stan­dard Char­tered Plc STAN.L and Bank of New York Mel­lon Corp BK.N, the ICIJ re­ported.

The SARs pro­vide key in­tel­li­gence in global ef­forts to stop money laun­der­ing and other crimes. The me­dia re­ports painted a pic­ture of a sys­tem that is both un­der­re­sourced and over­whelmed, al­low­ing vast amounts of il­licit funds to move through the bank­ing sys­tem.

A bank has a max­i­mum of 60 days to file SARs af­ter the date of ini­tial de­tec­tion of a re­portable trans­ac­tion, ac­cord­ing to the Trea­sury Depart­ment's Of­fice of the Comptrolle­r of the Cur­rency. The ICIJ re­port said in some cases the banks failed to re­port sus­pect trans­ac­tions un­til years af­ter they had pro­cessed them. The SARs also showed that banks of­ten moved funds for com­pa­nies that were reg­is­tered in off­shore havens, such as the Bri­tish Vir­gin Is­lands, and did not know the ul­ti­mate owner of the ac­count, the re­port said.

Staff at ma­jor banks of­ten used Google searches to learn who was be­hind large trans­ac­tions, it said. Among the types of trans­ac­tions high­lighted by the re­port: funds pro­cessed by JPMor­gan for po­ten­tially cor­rupt in­di­vid­u­als and com­pa­nies in Venezuela, Ukraine and Malaysia; money from a Ponzi scheme mov­ing through HSBC; and money linked to a Ukrainian bil­lion­aire pro­cessed by Deutsche Bank.

"I hope these find­ings spur ur­gent ac­tion from pol­i­cy­mak­ers to en­act needed re­forms," CEO Tim Adams said.

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.